NNL – Page 149 – Chinascope

China Review News: The South China Sea Is China’s Future Economic Growth Point

According to a commentary that China Review News recently published, China’s "Maritime Silk Road" is not only an economic development plan, but also a strategic solution to breaking the U.S.’ tight control of the Strait of Malacca.

Since the U.S. stationed war ships in Singapore to control this world cargo center, China’s best counter solution is to build a deepwater port in the South China Sea, changing that area into another "Singapore" and China’s future international transportation hub.

"China can build natural deepwater ports there because the several dozen coral reefs that it controls are relatively close to each other. They can thus be used to build cities over the sea. The Paracel Islands (Xisha Islands) can be the South China Sea’s administrative service center; Dongsha Island can be the production center; and the Spratly Islands (Nansha Islands) can be the cargo center, settlement center, and the tourism center."

China has conducted large scale infrastructure construction (building airports and harbors on top of coral reefs) in the Spratly Islands area. Some important harbor cities have started to show up and take shape. China’s land creation by dumping sand and earth into the ocean is not just for fishing; nor is it just for oil and gas extraction. It is to build a future economic growth point for China.

"As China builds more and more airports on those coral reef islands and converts more and more coral reef islands into natural deepwater ports, China’s South China Sea region will replace Singapore as the world’s logistics center. The Chinese government will follow the momentum to set up financial service institutions there to serve the world’s cargo transportation enterprises. The South China Sea will no longer be a quiet ocean. … It will become the most developed area in the world."

"Besides speeding up the infrastructure development, China should create new policies to encourage the development of the South China Sea region, for example, building it as a world’s offshore center and encouraging more companies to register there. The South China Sea should also be the world’s largest duty-free zone and largest free trade zone."

Source: China Review News, February 21, 2015
http://hk.crntt.com/doc/1036/2/2/0/103622065.html?coluid=169&kindid=12098&docid=103622065&mdate=0221000747

Briefings | | March 4, 2015 | Geo-Strategic Trend

China’s First Round of Anticorruption Inspections Starts with SOEs

According to a republished report on Xinhua, "The first round of the anticorruption inspections in 2015 will target 26 State-Owned Enterprises (SOEs)."

"On [March 1], the Central inspection teams arrived at 20 SOEs." These SOEs included China National Petroleum Corporation, China National Offshore Oil Corporation, China Power Investment Corporation, China Telecom Corporation, China Mobile Communications Corporation, and Baosteel Group, among others.

The inspection team will stay at the SOEs for two months (from February 28 to April 29). Its main task is to collect and review public reports on "issues about top leaders, their subordinates, and managers in key positions."

Source: Xinhua, March 2, 2015
http://news.xinhuanet.com/legal/2015-03/02/c_127531616.htm

Briefings | | March 4, 2015 | Government/Politics

Red Flag Manuscript: Convert Development Advantage to Benefit Theoretical Work and Discourse Power

Red Flag Manuscript published an article stating that, in current theoretical work, (we) "must pay high attention to the development of our discourse system" and "truly convert the [economic] development advantage of the Socialist Path with Chinese Characteristics to an advantage in theoretical work and discourse power."

The article said that there are four main discourse systems in China: political discourse, academic discourse, public discourse, and Internet discourse. The Communist Party should extend its control over all four systems. During that process, "The core discourse about Marxism and the Socialist Path with Chinese Characteristics cannot be lost or blurred. (We) should apply the core concepts of the ‘China dream,’ to these systems, while ‘comprehensively deepening reform,’ ‘Socialist core values,’ and ‘the rule by law on the Socialist Path with Chinese Characteristics.’"

Source: Qiushi Online, February 25 2015
http://www.qstheory.cn/dukan/hqwg/2015-02/25/c_1114432795.htm

Briefings | | March 4, 2015 | Government/Politics

People’s Daily: Expert’s Explanation of “Land-based Aircraft Carrier”

People’s Daily published an article in which military experts explained China’s "land-based aircraft carrier."

A Google satellite picture showed a large land-based construction in the shape of an aircraft carrier and other construction in the shape of a warship in a location in central China. The "land-based aircraft carrier" is about 300 meters long and 80 meters wide. A plane that looks like a J-15 fighter aircraft was also visible on the carrier’s deck. The warship next to it is thought to be the upper decks of China’s 055 Destroyer.

In an interview with the CCTV, military expert Li Li stated that this "land-based aircraft carrier" should be China’s land-based aircraft carrier training center. With the model of large warships next to it, it indicated that China’s training also includes system integration with multiple ships.

Li Li also said that China’s aircraft carrier may use both the catapult style and sky-jump style for planes to take off.

Source: People’s Daily Online, January 23, 2015
http://military.people.com.cn/n/2015/0123/c1011-26439359.html

Briefings | | February 18, 2015 | Defense/Military

China’s Food Security Problem

The Sun, a Hong Kong newspaper, published a commentary stating that food security has become a real threat to China. If the Sino-U.S. relationship went south, the U.S. could use the food weapon and "win over China without a war."

"For the first time, the first government directive in 2015, titled, ‘The Opinion on Deepening Countryside reforms and Accelerating Agricultural Modernization,’ listed the potato as the fourth staple food for China. In the past, the list included only three staple foods: rice, wheat, and corn."

"At the recent meeting of the Central Financial and Economic Affairs Leading Group, Xi Jinping put food security in a prominent position. It was prior to energy security, which indicated that China’s food problem is more severe than what the outside world thought."

"The North China Plain is the main production area for wheat, but the production of wheat has been decreasing year by year due to the contamination of underground water. Hunan Province is a main production area for rice, but its rice has become carcinogenic due to heavy metal pollution."

An earlier China Review News article on China’s food problem mentioned four challenges for China’s agriculture industry:
1. High Prices: The prices of major agricultural products in China exceed their international prices.
2. Increasing Costs: The costs of agricultural products keep increasing.
3. "The Yellow Line" for Subsidies: China’s commitment to the WTO means the country can no longer increase its subsidies to the agriculture industry.
4. "Red Light" on the ecological environment: In its agricultural decisions, China has to pay more attention to the ecological environment.

Sources:
1. The Sun Online, February 17, 2015
http://the-sun.on.cc/cnt/china_world/20150217/00674_001.html
2. China Review News, January 27, 2015
http://hk.crntt.com/doc/1035/9/3/0/103593027.html?coluid=151&kindid=11511&docid=103593027&mdate=0127102620

Briefings | | February 18, 2015 | Economy/Resources

Chinese Media on the “One Belt, One Road” Strategy

Recently, Chinese media have published several articles discussing the "One Belt, One Road" initiative, which is a major diplomacy and economic development strategy for China.

The term "One Belt, One Road" ("一带一路") refers to the "Silk Road Economic Belt" ("丝绸之路经济带"), which includes China, Central and West Asian countries, and the "21st Century Maritime Silk Road" ("21世纪海上丝绸之路"). It connects China, ASEAN member nations, South Asia, Africa, and Europe.

This combined economic zone contains a population of 4.4 billion. With 26 countries and regions, the size of its economy is $ 21 trillion. In the next ten years, China’s exports are expected to count for one third of the imports to these countries and China is likely to invest $1.6 trillion in this zone.

According to Baidu’s definition, "[this term] is not a physical entity or mechanism, but rather a concept involving cooperation and initiative. The purpose is to develop a partnership of economic cooperation between China and the countries in the zone and to build a community with political trust, economic integration, and a common fate and responsibility."

The following is a summary of key viewpoints from these media, some of which even contradict each other.

China Review News:
1. Investing in countries in this economic zone is more for political considerations than for economic reasons. In fact, many investments in Central Asia and South Asia involve infrastructure construction projects that have a low economic return. Though many countries have low labor costs, their poor infrastructure and strong labor unions jeopardize their investment environment.
2. The Southeast Asian region might be the first area in which China has a breakthrough, due to the large Chinese population and their stable political environments. Their exports of food and oil can help China to lower its security risk on food and the supply of resources.

Qiushi:
This strategy can enable China to develop a tight economic and trade relationship and common interest partnerships with emerging economies and developed European countries. This can counter the U.S.’ "Asia-Pacific Rebalance" strategy and relieve the pressure of China’s overproduction and of its being forced into the heavy purchase of U.S. debt.

Xinhua:
China should focus on the "belt" (land) instead of the "road" (sea). This is because on the sea side, China will face strong resistance from ASEAN countries on its exports. This relates to their own domestic policies and can’t be completely influenced by China’s investment in their countries.

Stock Times:
The globalization of the renminbi and developing renminbi offshore trading centers are critical steps in the "One Belt, One Road" plan. China has made good progress in issuing renminbi bonds, setting up renminbi offshore trading centers (e.g. in Frankfurt and London) and offshore markets (Hong Kong, Singapore, Taiwan, and London), and in signing currency swap agreements with 28 countries.

Sources:
1. Baidu
http://baike.baidu.com/view/12241799.htm
2. China Review News, January 18, 2015
http://hk.crntt.com/doc/1035/7/9/4/103579473.html?coluid=202&kindid=11695&docid=103579473&mdate=0118095339
3. Qiushi Online, January 21, 2015
http://www.qstheory.cn/freely/2015-01/21/c_1114074599.htm
4. Xinhua, January 27, 2015
http://news.xinhuanet.com/fortune/2015-01/27/c_127424890.htm
5. Stock Times Online, January 26, 2015
http://www.stcn.com/2015/0126/11988834.shtml

Briefings | | February 4, 2015 | Geo-Strategic Trend

Study Times: China Should Create State Enterprises

Study Times republished an article from Beijing Youth Daily arguing that China should create a number of state enterprises. According to the author, state enterprises are different from State-Owned Enterprises (SOEs). The latter are companies that the government owns, but state enterprises are companies, whether private or state-owned, that are a symbol of the country or that represent its country in certain industries.

For example, Samsung is the state enterprise of South Korea, Daimler AG is of Germany, and Apple and Google are of the U.S. The author suggested that Huawei (an IT industry) and the newly formed CRRC Corp. (in the railway industry) are the two best candidates to become state enterprises of China, as they are both strongly competitive in their fields. Huawei also needs the government’s backing to compete in the international market and to deal with other governments.

As a result of their monopoly positions, many large SOEs, such as those in the oil, electricity, and banking industries, have substantial revenues and a large market share in China. However, they do not have the ability to compete in global markets, and thus cannot become state enterprises in a real sense.

Source: Study Times, January 19, 2015
http://www.studytimes.cn/shtml/xxsb/20150119/9154.shtml

Briefings | | January 28, 2015 | Economy/Resources

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